Near my partner’s house they finally demolished an abanonded hospital that had been there for decades and I think they are going to build luxury condos that a lot of renters in my town cannot afford.
I expressed my concerns to my partner and he was explaining how its a good thing to create more housing regardless of whether its luxury housing or low income. I said that I wasn’t upset about more housing but how luxury condos will cause rentals in the area to go up due to increased value from slum and corporate landlords. He continued to explain I don’t know economics and doubled down that this will lower rental costs as renters will be moving to these condos freeing up housing across the city. I continued to tell him the condo prices are too expensive for this area and most will remain vacant for a long time as I have seen the rental market in my area and there are condos closer to me that have been sitting vacant for almost two years now because of the price tag and the condo fees
We dropped the conversation there because we stood very opposite in this debate. And sure I don’t know a ton about economics but what I do know is that rental prices in my area I can’t find a place under $1700 right now. I am currently fighting my landlord against an eviction because they are refusing to accept government rental assistance I applied and got approved for. I can’t move I can’t afford it I can’t beat $1100. My partner thinks my case is sad but he still stood where he does on the issue mostly because he makes way more money than me.
So please explain basic housing and economics like I am five.
In: Economics
There are let’s say 10 houses in a neighborhood – the Hills.
There’s 10 houses in the valley nearby.
The hills is prettier and more desirable. People want to live there. This month one of the Hill house owners wants to sell their house it’s old, needs work, roof leaks a little.
There are three families looking to move to the Hills- 2 rich families from out of town and 1 middle class family from the valley that needs more space because they have a young kid.
Scenario A) leave abandoned building as is- three different families bid for the house – one of the two rich families ends up with the house. The other rich family starts looking for something else, maybe they start looking in the valley.
Price of old house goes up, people who live in the city (middle class family) have to stay where they are or move out of the city- they might end up selling their house to the other rich family and move out to the suburbs. Gentrification all around, middle class leaves city.
Scenario B) abandoned house turned into 5 luxury condos. Two rich people and middle class fam all bid for same old house but the price doesn’t go as high because the two rich families decide it’s a better value to go with one of the luxury condos. Middle class gets old house in the Hills, two rich families in condo. City/neighborhood gets more money for roads and schools from property taxes. Middle class old house in valley gets sold to someone moving back to the valley after college.
Everyone gets houses, housing costs don’t go up as much.
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